- Stakeholders, Memberships, & Partnerships
- Procurement for Client Projects
- Procurement for Operations
- Business Partnerships
Supply Chain: Procurement for Client Projects
As is typical in the engineering and construction industry, the supply chain for CH2M projects consists of suppliers and subcontractors that provide a wide variety of goods and services. These goods and services vary from project to project and may include materials, engineered equipment, fabricated products, professional and technical services, and construction services. Strategic sourcing decisions are made at the project level and may include local, domestic, or global sourcing; large or small and disadvantaged business enterprises; and a variety of supplier types, such as manufacturers, fabricators, distributors, brokers, and others. Our supply chain database includes over 26,000 active registered vendors, with approximately 17,000 tied to our automated ranking system, and a total contract value of US$2.2 billion in 2015. We have suppliers in all regions where we operate.
Procurement provides a valuable tool for us to lessen our environmental impact and influence supplier behavior. For our company operations, we have committed to working with supply chain partners to reduce impacts and create markets for sustainable goods and services. For our client projects, we have established a methodology and toolset for identifying and selecting suppliers and subcontractors that have robust sustainability programs, suppliers that have products that achieve project sustainability targets, and subcontractors that will implement acceptable sustainability solutions on our construction sites. We expect all members of our supply chain to endorse our values on business ethics, environmental sustainability, labor and employment, and fair-trade practices. Our Supply Chain Ethics & Business Conduct Principles outline our expectations for our suppliers and subcontractors. Most of our suppliers are screened for compliance with the ethics and business conduct principles.
CH2M’s procurement organization separates management of direct (client) and indirect (overhead) expenditures. Indirect Procurement implements sustainability screening on long-term, high-value agreements, such as technology, services, paper, office supplies, and furnishings; this screening is described in Supply Chain: Purchasing for CH2M Operations. Direct Procurement offers approaches to assist engineers and construction designers in selecting more sustainable construction materials, equipment, and services, in collaboration with clients and consideration of budget constraints. Nearly half of our direct procurement spending is in subcontracting, which involves equipment and labor. Approximately one-third of our spending is on services, and the remainder of our spending is composed of equipment, materials, and other categories. The majority of CH2M’s procurement spending lies within direct procurement agreements.
Our supplier qualification and performance management system capabilities were significantly enhanced in late 2015; they will be implemented globally across the supply chain in 2016. Benefits of the new system include the ability to collect comprehensive sustainability capability attributes for use in sourcing decisions, contract formation, and supply chain performance management. The sustainability capability information collected includes planning, products and services, energy, carbon, and transportation. Capabilities to measure and report on actual sustainability performance against contract requirements include stakeholder surveys and supplier scorecards.
There have been no significant changes to the supply chain itself since 2012, either as a result of organizational changes or major acquisitions.